The National Anti-Profiteering Authority (NAA), while imposing a penalty on a Company for not reducing the base price despite the GST rate reduction, held that customers are entitled to benefit from tax rate reduction by way of reduced prices.
The Applicant had purchased an imported “Used Heidelberg Offset Press SM 74-5 +LX, Mfg. The year 1997 with complete tools and accessories from the Respondent for which the Respondent had quoted price of Rs. 1.40,00,000/- as per the proforma invoice. He was, however, billed for an amount of Rs. 16520000 /- as per tax, which included GST @ 18% on Rs. 1,40,00,000/-.
The Applicant also alleged that after the implementation of the GST, various existing taxes like VAT, CST, CVD, SAD, etc. had been subsumed in the GST but the Respondent charged 18% GST on Rs. 1,40,00,000/- which was the quoted price inclusive of erstwhile taxes like CVD and SPL CVD etc and did not pass on the benefit of ITC to him by way of commensurate reduction in price in terms of Section 171 of the CGST Act, 2017.
The Authority headed by Chairman B.N. Sharma and Technical Members J.C. Chauhan and Amand Shah held that the respondent did not pass the benefit of Input Tax credit to the consumer, in contravention of Section 171 of Central Goods and Service Tax (CGST), 2017.
“Therefore, the respondent is apparently liable for imposition of penalty under the provisions of the above Section. Accordingly, a Show Cause Notice be issued to him directing him to explain why the penalty prescribed under Section 171 (3A) of the above Act read with Rule 133 (3) d) of the CGST Rules, 2017 should not be imposed on him,” the authority said.